Optimising the back office of an advice firm – the final frontier?

However, addressing this “final frontier” is crucial for enhancing a firm’s agility, minimising business risks, and achieving efficiencies that ultimately reduce the cost of delivering advice. While financial advisers play a key role in guiding clients, it’s the streamlined and efficient organisation of back-office operations that truly underpins a firm’s overall success.

Can a key driver of culture and business satisfaction really be linked to the back office?

As we discovered in our recently released Advice Operations Research Report 2024, a well-oiled back office can be a game changer for any financial planning firm. The report highlights a compelling link between the state of a firm’s back office and its overall culture. Our findings demonstrated that firms with back offices functioning like a “finely tuned machine”, characterised by quick, accurate turnaround times, achieve a stellar culture score of 4.6 out of 5. On the other hand, firms where the back office is more chaotic, described in the report as “a dog’s breakfast”, see their culture score drop to just 2.75 out of 5.

This data underscores the importance of a well-organised back office not just for operational efficiency but for fostering a positive work environment. When a back office is streamlined, it creates a ripple effect of improved morale and productivity throughout the firm. However, it also raises an interesting question: Does a great culture drive operational excellence, or is it the other way around?

How satisfaction ties into operational success

The back office also plays a critical role in overall business satisfaction. Our research revealed that firms with efficient back offices, where operations run smoothly, report a satisfaction score of 4.08 out of 5 in terms of business success. In contrast, those struggling with disorganised back offices report a significantly lower satisfaction score of just 2 out of 5.

It’s easy to see why. When the back office operates seamlessly, it not only ensures that goals are met, but it also fosters confidence and satisfaction across the firm. Conversely, when back-office operations are disjointed, it can lead to frustration, lower productivity, and a general sense of unease within the team.

Streamlining for better performance

The solution involves more than just streamlining processes; it requires a well-coordinated approach to ensure everything runs like clockwork. By agreeing on a “one business, one way” mantra, setting up clear business rules for standard turnaround times on everyday tasks, and automating routine activities like data entry and compliance checks, firms can ensure that operations are consistent and efficient. This not only reduces the risk of errors but also frees up staff to focus on more strategic activities that add value to the business.

Embracing technology for a smoother ride

Technology is a critical tool for enhancing back-office efficiency. With the right systems in place – like a robust CRM, cloud-based document management, and compliance software – firms can significantly reduce manual workload, minimise errors, and ensure regulatory compliance.

Investing in your team: The human touch

Technology and streamlined processes are essential, but they work best when paired with a well-trained team. Training plays a pivotal role in enhancing individual skills, fostering innovation, and maintaining compliance with regulatory standards. Investing in training not only cultivates employee growth and engagement but also enhances quality-of-service delivery to clients, ultimately driving long-term success.

Despite its importance, many firms struggle with training outside the CPD required for their licensed advisers. Finding good people for the team is already a challenge, and then proper training is often neglected, possibly because it requires time that feels impossible to spare. However, as the Advice Operations Research Report 2024 highlights, 70 per cent of participants indicated they didn’t have a training and development plan. Failing to invest in structured training can lead to disengagement and a lack of innovation, making it harder to retain top talent and maintain high standards of service. It’s an investment that can’t be overlooked if we want to build a resilient and agile team.

Transforming your back office for success

The back office is more than just a support function – it’s both a strategic partner and a vital component that influences your firm’s culture, satisfaction levels, and overall success. By prioritising a few key areas and investing in your team, your back office can be transformed into a finely tuned machine that drives your business forward.

We see the challenges you face every day – balancing the delivery of exceptional service to your clients, managing a busy back office, and navigating regulatory complexities. That’s why we created the Engine Room Overhaul program with you in mind. This program is designed to help you overhaul your engine room over a three-month time frame, without shutting down your whole business as you renovate it.

Lana Clark is senior consultant with Elixir powered by VBP.